According to a report, Italy intends to generate almost 1.5 billion euros through a system to recoup profits from solar and clean energy providers to rein in spiraling energy prices. The legislation included in a larger government order that took effect last month must be approved by parliament within 60 days, or it would expire.
Since July, Rome has set aside almost ten billion euros to offset a spike in retail energy prices, leaving many individuals and companies gasping for air.
The administration stated that the clawback would have an adverse effect on solar power facilities that get large fixed-tariff subsidies in addition to high market pricing owing to the gas crisis.
The report stated that these subsidies cost customers almost 6 billion euros each year in energy costs. However, the plan has enraged many producers, with lobby organization Italia Solare urging Rome to revoke the proposal, stating it poses a grave threat to Italy's and Europe's energy transition.
To satisfy climate commitments, Italy aims to add at least 8 gigawatts of renewable energy capacity each year until 2030, and developers are concerned that the mechanism would hamper development.
Rome's 2008 attempt to recoup gains from a spike in oil prices was declared unlawful in 2015.
The clawback program applies to solar energy producers with a capacity greater than 20 kW who received incentives under a previous subsidy program.
"Strong spot price volatility has weakened this form of incentive, allowing producers to earn additional profits," the order stated. It will also be taxed on unsubsidized renewable energy sources, such as hydroelectric generators that profit from high market prices but avoid the costs associated with rising gas prices and carbon allowances.
According to a recent analysis by Italian broker Equita, regional utilities A2A and Iren were among the firms most hit, accounting for around 3% of core profits. However, the broker stated that there was almost no impact since Enel, one of the world's largest green energy firms and wind player ERG sold forward output.